Tuesday, November 7, 2017

Oil surges on Saudi purge, Trump’s Asia trip in focus

Crude oil prices surged to their highest level since June 15 as
Saudi’s anti-corruption purge catalysed new waves of concerns over the
stability of the world’s largest oil exporter.

Dozens of princes, ministers and business leaders were arrested under
corruption and money laundering charges by Crown Prince Mohammed bin
Salman. The news even triggered some profit taking and panic selling
during early Asian trading hours on Monday. The crackdown’s full impact
to the oil market remains to be seen, but usually market have short
memory on regional political events and the impact tends to be impulsive
and short-lived.

Technically, Brent’s price broke out above $61.4 resistance and is
facing some selling pressure at around $64.6 area (161.8% Fibonacci
extension level). The 10-day simple moving average line and SuperTrend
(10, 2) are both sloped upwards, suggesting the current bull trend
remains intact. Momentum indicator MACD remains strong, showing no sign
of slowdown. The RSI, however, has entered into overbought zone at
around 80%, suggesting that some technical pullback is possible in the
days to come.

President Donald Trump announced there is a ‘very unfair trade
situation’ with US’ largest trading partners including Japan during his
visit in Tokyo yesterday. It is widely expected that he will further
address the trade deficit and intellectual property disputes with
Chinese leader Xi in his upcoming visit to Beijing, in an attempt to win
a ‘free trade, fair trade, or reciprocal trade’ between US and China.
Outside of trade agreements and investments, North Korea is also on top
of his agenda this time.

Technical Analysis:

Brent – Cash

The 10-Day Simple Moving Average and SuperTrend (10,2) are both sloped upwards, suggesting uptrend remains intact

Facing strong resistance level at around $64.6 area, which is the 161.8% Fibonacci Extension level